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Out with the Old and in with the New

December 27, 2011 – 6:06 pm

As we enter the last week of the year we will see very light trading volume for stocks, and markets around the world will deal with holiday shortened trading days.

This morning our market is moving up slightly as there was better than expected Consumer Confidence numbers for December. That means very little as mutual fund and other investors position themselves for the year end. They will make changes to their portfolios to take advantage of tax avoidance trades or in the case of mutual funds selling their losing positions and buying the winners in an effort to make themselves look better after a bad year for most funds.

As we approach the new year all eyes will continue to watch Europe. This morning an official in Germany was upbeat about that country’s prospects. Too bad it won’t be up to that single country in the Euro zone. It is the debt carried by other countries that bode ill for the entire continent. Italy’s cost of debt is unsustainable at about 7%. If they do not get that down they may well have to default and that would be a mess. That will be the focus in coming weeks and months as it has been for two years.

This week may well see a holding pattern but expect some new year fireworks.

Good Trading
Steve Peasley

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